House repossession rates are far too low

Three Seasons

If we want a functioning market to buy and sell houses we really need to be seeing higher rates of house repossessions. IMO the very low rate of house repossessions will cause more suffering to the citizens of Ireland.

Z.O.D!!!

This will end well..........

El_Dangeroso

As a potential first time buyer that's not in negative equity I approve this message.

anncoates

Three Seasons wrote: »

IMO the very low rate of house repossessions will cause more suffering to the citizens of Ireland to me and that house I want in Terenure that has a pesky family in it trying to keep a roof over their heads.

Fixed.

orestes

Economics isn't my strong point, so could you explain to me how this would work? You can even use little dolls as teaching aids if you need to.

Czarcasm

Another repossession thread?

Because there just aren't enough repossession threads started today alone already.

xzanti

Fergal? that you?

anncoates

Funnily enough, everybody that I know that's a sneering expert on how obsessed the Irish are about property (and how they were such a model of fiscal rectitude during the boom) are the ones that never seem to shut fucking up about finally buying a house when the market hits bottom.

minidazzler

orestes wrote: »

Economics isn't my strong point, so could you explain to me how this would work? You can even use little dolls as teaching aids if you need to.

It would force sales at lower prices and so it would move the economy along, as the demand will rise to meet supply if houses are cheap enough..... though I'm not an economist either :pac:

AEDIC

Oh good...greed... now that certainly didnt contribute to the mess we are in now did it

Nodin

minidazzler wrote: »

It would force sales at lower prices and so it would move the economy along, as the demand will rise to meet supply if houses are cheap enough..... though I'm not an economist either :pac:

It hasn't stopped anyone else, why put it in your way?

Princess Consuela Bananahammock

orestes wrote: »

Economics isn't my strong point, so could you explain to me how this would work? You can even use little dolls as teaching aids if you need to.

I don't think he's coming back.

donvito99

1. "House repossession rates are far too low"
2. "higher rates of house repossessions" for a "functioning market"
3. ???
4. Profit

Three Seasons

anncoates wrote: »

Fixed.

If they want to keep their house then they should not break their contract that they signed.

Families which could afford houses if they weren't overpriced and the market was more liquid are missing out on being able to have a "roof over their heads" as a result of a clogged up housing market.

Three Seasons

donvito99 wrote: »

1. "House repossession rates are far too low"
2. "higher rates of house repossessions" for a "functioning market"
3. ???
4. Profit

Markets exist to benefit everyone.

A well functioning market provides fair valued housing for families to live in. A poorly functioning market causes more pain and gives less value to the market participants.

Imagine an economy and world where only three products are needed to live and enjoy life and are the only three products in the market.

Food, clothing and shelter.

Three groups of people exist, each of which sells one of the above.

Without a well functioning market people suffer as they can't trade their time and effort to get what they want. They don't have the time it skill base to produce sufficient quantities if everything for themselves so they all suffer.well functioning Markets allow everyone to meet their needs from their time and effort.

The moral of the story is markets make out lives a lot better. We need them to work properly. Short term pain for a minority is better than long term pain for everyone.

orestes

minidazzler wrote: »

It would force sales at lower prices and so it would move the economy along, as the demand will rise to meet supply if houses are cheap enough..... though I'm not an economist either :pac:

Three Seasons wrote: »

If they want to keep their house then they should not break their contract that they signed.

Families which could afford houses if they weren't overpriced and the market was more liquid are missing out on being able to have a "roof over their heads" as a result of a clogged up housing market.

Nope, I'm still not getting it.

Here, use these.

Antar Bolaeisk

Daft question but what exactly do you plan to do with all the repossessed houses? Flood the market with them and lower the cost of houses further, generating more negative equity, devaluing the now repossessed houses and kicking people out onto the street?

The Backwards Man

I agree with the OP. If people's houses are taken from them they will have more disposable income to spend on cigarettes and foreign holidays.

Three Seasons

Antar Bolaeisk wrote: »

Daft question but what exactly do you plan to do with all the repossessed houses? Flood the market with them and lower the cost of houses further, generating more negative equity, devaluing the now repossessed houses and kicking people out onto the street?

If you can meet your mortgage payments you won't be out on the street if the market value of your house falls. What's better for the economy is fairly priced housing.

Cian92

Antar Bolaeisk wrote: »

Daft question but what exactly do you plan to do with all the repossessed houses? Flood the market with them and lower the cost of houses further, generating more negative equity, devaluing the now repossessed houses and kicking people out onto the street?

Yep, in essence. The price of property will finally hit the bottom, so that certainty as regards house prices can return.

Even now people are overpaying for residential property as we the tax payer are propping up the market by not allowing for repossessions.

Negative equity is only a problem for those who want to sell their house, why should I have much sympathy for those who bought with the intention to sell?

If the property market hits the bottom, we could finally begin to see a recovery in the construction sector and in mortgages being approved and an increase in work for auctioneers, conveyancing work and all the related services that go with this.

We have a very low rate of repossessions, it is the tax payer who pays to keep these people in their home.

Seaneh

Three Seasons wrote: »

If we want a functioning market to buy and sell houses we really need to be seeing higher rates of house repossessions. IMO the very low rate of house repossessions will cause more suffering to the citizens of Ireland.

The IMF and every respected econimist in the world disagree with you. but sure do they know.

Three Seasons

Seaneh wrote: »

The IMF and every respected econimist in the world disagree with you. but sure do they know.

Really I heard numerous respected economists complain about are low rate of house repossessions.

Admit it, you made that up.

Boombastic

Yep, repossessions need to start to those not honouring the contract they signed, also Nama properties need to be released on to the market, until then, houses will never be sold for their true value

Supply and demand

Dwork

Boombastic wrote: »

Yep, repossessions need to start to those not honouring the contract they signed, also Nama properties need to be released on to the market, until then, houses will never be sold for their true value

Supply and demand

ahh good oh, we'll be seeing seanie and all the other fat cats that waltzed out on massive sums getting turfed out of their mansions so? I agree fully. Might put off the whole "reposessing ordinary joe and jolene soaps homes" for a bit.

Seaneh

Three Seasons wrote: »

Really I heard numerous respected economists complain about are low rate of house repossessions.

Admit it, you made that up.

The representitive if the IMF who visited the government last week said that repsessions were the last thing they wanted to see. They stressed that they wanted to see the government force tge banks to make restructuring arangements with those in arrears as more aggressive repossessions would just expose the goveremt to even more debt they'd need to borrow more money for another round of recapotalisation of AIB and BOI and thats the last thing we need.

Then there are people likr O'Toole, Kelly and McWilliams who've been saying the same thing for years.

Boombastic

Dwork wrote: »

ahh good oh, we'll be seeing seanie and all the other fat cats that waltzed out on massive sums getting turfed out of their mansions so? I agree fully. Might put off the whole "reposessing ordinary joe and jolene soaps homes" for a bit.

I hope so and all the other lads still living in mansions, even though they declared bankrupt

3ndahalfof6

The opposite of house prices, how crazy is that.

Dwork

3ndahalfof6 wrote: »

The opposite of house prices, how crazy is that.

Quite crazy.

squod

No-one finds it peculiar that repossessions are being talked about now? Must be a bond market bubble going to burst or something.

Dwork

squod wrote: »

No-one finds it peculiar that repossessions are being talked about now? Must be a bond market bubble going to burst or something.

Not at all. The Banks are emerging from their bailouts, the Govt is happy as it looks like they will turn a profit on their interest and so the "need to be nice" is over. They can go back to being the high riding cnuts they always were. They can bin the sackcloth they were wearing over their pinstripes. It was only imitation sackcloth anyway. They bought an unused joblot from the Vatican.

KyussBishop

So, the people who went to the banks and took out mortgages, that were perfectly sustainable before the crisis, who have now lost jobs and run into financial difficulties because of the banks causing the financial crisis, should now be forced to give up their properties (losing all the expenditure they already sunk into them) to those same banks? (the ones we also threw massive shítloads of public money to, in order to bail them out? the ones who caused the inflation in house prices in the first place, and thus the crisis?)

Banks which will then sell-on the properties, probably to investors some of which who grew rich out of exploiting the property bubble and who got out at the right time, who can then buy them up cheap while us plebs are unable to while being bled through high taxes/living-expenditure, so that they can sell them on to us again at-profit once the housing bubble mill starts rolling again?

Ah sure what next, soon we'll be hearing that the banks create money out of nothing, so they can lend it out to us at interest.

Boombastic

KyussBishop wrote: »

So, the people who went to the banks and took out mortgages, that were perfectly sustainable before the crisis, who have now lost jobs and run into financial difficulties because of the banks causing the financial crisis, should now be forced to give up their properties (losing all the expenditure they already sunk into them) to those same banks? (the ones we also threw massive shítloads of public money to, in order to bail them out? the ones who caused the inflation in house prices in the first place, and thus the crisis?)

Banks which will then sell-on the properties, probably to investors some of which who grew rich out of exploiting the property bubble and who got out at the right time, who can then buy them up cheap while us plebs are unable to while being bled through high taxes/living-expenditure, so that they can sell them on to us again at-profit once the housing bubble mill starts rolling again?

Ah sure what next, soon we'll be hearing that the banks create money out of nothing, so they can lend it out to us at interest.

yes, the should have stress tested their mortgages for all eventualities and read the contract they were signing

.jacksparrow.

KyussBishop wrote: »

So, the people who went to the banks and took out mortgages, that were perfectly sustainable before the crisis, who have now lost jobs and run into financial difficulties because of the banks causing the financial crisis, should now be forced to give up their properties (losing all the expenditure they already sunk into them) to those same banks? (the ones we also threw massive shítloads of public money to, in order to bail them out? the ones who caused the inflation in house prices in the first place, and thus the crisis?)

Banks which will then sell-on the properties, probably to investors some of which who grew rich out of exploiting the property bubble and who got out at the right time, who can then buy them up cheap while us plebs are unable to while being bled through high taxes/living-expenditure, so that they can sell them on to us again at-profit once the housing bubble mill starts rolling again?

Ah sure what next, soon we'll be hearing that the banks create money out of nothing, so they can lend it out to us at interest.

It's everyone else's fault except mine.

Princess Consuela Bananahammock

Three Seasons wrote: »

A well functioning market provides fair valued housing for families to live in. A poorly functioning market causes more pain and gives less value to the market participants.

I'm in the boat with the rest of the non-economists, but wasn't it the markets that got people into this mess in the first place?

galwayrush

I know someone who bought a reposessed house, he and his family have had a very negetative experience from the original owner's neighbours.

sock puppet

Seaneh wrote: »

The IMF and every respected econimist in the world disagree with you. but sure do they know.

Bit off topic but I doubt whether any of us could even name a respected economist that isn't Krugman, Stiglitz or a central banker. Leading economists generally don't make tv or media appearances.

Seaneh

sock puppet wrote: »

Bit off topic but I doubt whether any of us could even name a respected economist that isn't Krugman, Stiglitz or a central banker. Leading economists generally don't make tv or media appearances.

Well, people like Morgan Kelly, Constantin Gurdgiev and Hernando de Soto Polar have been very clear and open with their opinions. They are pretty well respected on not just a European level.

KyussBishop

.jacksparrow. wrote: »

It's everyone else's fault except mine.

Conversely, it's only the homeowners fault, and they should bear the total cost, seeing as it's up to them to make sure fraudulent lending isn't inflating the price of the house they are buying, and it is their fault for not being prescient, and seeing the massive financial crisis coming? (the one that practically every economist, bar a small minority, missed coming)

In the same vein, the fraudulent and excessive lending is not the banks fault in any way either, and neither was the ensuing property bubble, because it is not the banks fault for ignoring regulations or the law, it is up to the regulator to tell them when they are breaking the law, or engaging in excessive risk (ignorance is a valid excuse).

It's everyone elses fault except the banks, right? Fault/blame is 100% black/white, and there is no such thing as shared culpability; thus the full cost should fall on the homeowner?

gurramok

Seaneh wrote: »

Well, people like Morgan Kelly, Constantin Gurdgiev and Hernando de Soto Polar have been very clear and open with their opinions. They are pretty well respected on not just a European level.

Either the banks take the hit, the borrowers or the taxpayer. Looks like the taxpayer but it all depends on these "restructuring agreements".

I agree with the OP, there are vast amounts of property(90,000 mortgages in arrears, if even 20% of these are repossessed it will help the market find the true bottom) been withheld from the market in a bankrupt country being run by the IMF, you couldn't make it up.

jimmycrackcorm

galwayrush wrote: »

I know someone who bought a reposessed house, he and his family have had a very negetative experience from the original owner's neighbours.

They should invite the neighbours around for a house party and provide free beer with all the money they saved from the low price they paid.

Madam_X

Nah, a person/couple who bought a modest 3-bed semi-D in an ordinary area and who were in full employment and the repayments were manageable... and then lost their job/got their salary or hours cut... doesn't deserve to be made homeless for not predicting the future. They should keep paying their mortgage of course, but repayments that they can manage, and if that means making sacrifices, so be it, and if they get another job with the old salary, then repayments should increase in accordance. But baying for them to be made homeless... is just sad really.

clairefontaine

Can someone explain to me how bailing out the banks was a preferable option to bailing out the mortgage holder?

If they bailed out the mortgage holder the banks would still be getting their money right?

Three Seasons

Madam_X wrote: »

Nah, a person/couple who bought a modest 3-bed semi-D in an ordinary area and who were in full employment and the repayments were manageable... and then lost their job/got their salary or hours cut... doesn't deserve to be made homeless for not predicting the future. They should keep paying their mortgage of course, but repayments that they can manage, and if that means making sacrifices, so be it, and if they get another job with the old salary, then repayments should increase in accordance. But baying for them to be made homeless... is just sad really.

No one here wants people to be homeless. I'd like to see the government set up emergency shelters as a fail safe against families of repossessed homes becoming homeless.

But there needs to be rules by which we operate our society and economy. People can't be allowed to live in their house indefinitely without paying their mortgage. What's the point of giving the deeds as collateral in the first place if otherwise?

Then without a form if collateral the mortgage market dies and sh1t hits the fan and the potential for many more repossessions could crystallise.

When you sign a contract to pay a series of mortgage payments with the caveat that the house can be reposed in the event of default you can't complain when your house is repossessed upon default. If contracts mean nothing our society is fukced.

If you don't agree to the terms and conditions don't sign the fukcing contract.

The risk of losing your job at a future date is your own risk. Take that into account before deciding to sign the contract. Maybe more people would actually save up a reserve fund before signing the contract and not put themselves in a situation where they can barely cover their bills from the outset.

And do you know what would happen if people saved up a reserve fund before signing the contract. House prices would drop and become more affordable. Personal responsibility needs to be encouraged as it works out better for all long term.

BrokenArrows

Madam_X wrote: »

Nah, a person/couple who bought a modest 3-bed semi-D in an ordinary area and who were in full employment and the repayments were manageable... and then lost their job/got their salary or hours cut... doesn't deserve to be made homeless for not predicting the future. They should keep paying their mortgage of course, but repayments that they can manage, and if that means making sacrifices, so be it, and if they get another job with the old salary, then repayments should increase in accordance. But baying for them to be made homeless... is just sad really.

A person who takes out a mortgage takes the risk of owing that much money and not being able to repay it.

Banks should do their best to arrange payments with them so they are manageable but at the end of the day its not a charity.

Granted some people are in a ****ty position but if the banks don't take the houses back they start to make a loss and the tax payer will end up paying for that persons house.

clairefontaine

Three Seasons wrote: »

No one here wants people to be homeless. I'd like to see the government set up emergency shelters as a fail safe against families of repossessed homes becoming homeless.

But there needs to be rules by which we operate our society and economy. People can't be allowed to live in their house indefinitely without paying their mortgage. What's the point of giving the deeds as collateral in the first place if otherwise?

Then without a form if collateral the mortgage market dies and sh1t hits the fan and the potential for many more repossessions could crystallise.

When you sign a contract to pay a series of mortgage payments with the caveat that the house can be reposed in the event of default you can't complain when your house is repossessed upon default. If contracts mean nothing our society is fukced.

If you don't agree to the terms and conditions don't sign the fukcing contract.

The risk of losing your job at a future date is your own risk. Take that into account before deciding to sign the contract. Maybe more people would actually save up a reserve fund before signing the contract and not put themselves in a situation where they can barely cover their bills from the outset.

And do you know what would happen if people saved up a reserve fund before signing the contract. House prices would drop and become more affordable. Personal responsibility needs to be encouraged as it works out better for all long term.

Contracts get renegotiated all the time, or nullified.

It may be an idea to revise the mortgage contract altogether.

It may also be an idea to drop some of the frivolous subjects in school and start consumer economics from third class onwards.

Irish people were not used to having money. It was new to them. It was like handing a 19 year old a credit card with a 20k limit on it. There is little fiscal education in the curriculum. They were bad consumers and therefore inflated prices left right and center. I would agree with this portion of taking responsibility. But the banks committed fraud against a naive population.

galwayrush

BrokenArrows wrote: »

A person who takes out a mortgage takes the risk of owing that much money and not being able to repay it.

Banks should do their best to arrange payments with them so they are manageable but at the end of the day its not a charity.

Granted some people are in a ****ty position but if the banks don't take the houses back they start to make a loss and the tax payer will end up paying for that persons house.

Some people kicked out of their homes will end up getting council houses, guess the tax payer ends up paying for thatas well.

Three Seasons

clairefontaine wrote: »

Contracts get renegotiated all the time, or nullified.

It may be an idea to revise the mortgage contract altogether.

It may also be an idea to drop some of the frivolous subjects in school and start consumer economics from third class onwards.

Irish people were not used to having money. It was new to them. It was like handing a 19 year old a credit card with a 20k limit on it. There is little fiscal education in the curriculum. They were bad consumers and therefore inflated prices left right and center. I would agree with this portion of taking responsibility. But the banks committed fraud against a naive population.

Yes education about finances should be a big priority now after this mortgage crisis. We need to pummel it into kids heads like we do anti drink driving campaigns or seatbelt campaigns.

What fraud are you referring to that the banks committed?

Three Seasons

galwayrush wrote: »

Some people kicked out of their homes will end up getting council houses, guess the tax payer ends up paying for thatas well.

And it will teach everyone a valuable lesson to be more wise with their money or their house will be repossessed. This is healthy for the economy and the well being of its citizens. I want to see as many happy citizens as possible. Low repossessions rates will lead to a lot of unhappy citizens.

JRant

I can't even begin to understand the strain a lot of those families are under. The sleepness nights and tears cried worrying about their plight. But I think in some cases the families would be nearly better off losing the house and reaccessing their situation.
I hope the new insolvency bill will offer some relief for people that will eventually lose their homes.

One possible solution would be to use some of the 200,000+ properties under the control of NAMA, belonging to us citizens, to possibly rehouse people unfortunate enough to lose their homes and many others on the housing list.

Boombastic

Madam_X wrote: »

Nah, a person/couple who bought a modest 3-bed semi-D in an ordinary area .............

So only townies who live in estates? what if I borrowed the same amount, but built a six bedroom house on a site given to me and did all the labour myself? Why should I not be entitled to a write off aswell?

Dwork

Three Seasons wrote: »

And it will teach everyone a valuable lesson to be more wise with their money or their house will be repossessed. This is healthy for the economy and the well being of its citizens. I want to see as many happy citizens as possible. Low repossessions rates will lead to a lot of unhappy citizens.

It's funny really. I've two mates, both were listed on Irelands rich lists. Both were personally worth over 170m at one stage. Both are bust, and owe c.a 400million between them.(For the brighter types, that is an oxymoron in itself, give me 30million and I'd own Dublin, never mind go bust but anyhoo). Now, both are absolutely bust, buried. I know others, run of the mill lads, who owe 2, 3, 10 million or thereabouts each. None of these are homeless. No-one wants to re-posess their houses(HUH???) They all still drive very nice 4*4s. Yet, some ordinary couple, with their cardboard semi and a measly 200k debt, are going onto the street? There's somthing very fcuked up with the system we have, sorry, but there just is. If you name most of the big guns of the boom(The bust ones), I know them, some very well as it happens. I do not know of one with no home or car. I just do not get it. I didn't borrow, despite the banks hassling me to do so as I worried about losing my home. looks like I was the mug, eh.